LION ELECTRIC FILES APPLICATION FOR CREDITOR PROTECTION UNDER THE CCAA
Lion Electric (NYSE: LEV) (TSX: LEV), a manufacturer of electric medium and heavy-duty urban vehicles, has filed for creditor protection under the Companies' Creditors Arrangement Act (CCAA) with the Superior Court of Quebec. The company seeks recognition of CCAA proceedings in the US under Chapter 15 of the Bankruptcy Code. The application includes a formal sale and investment solicitation process (SISP) to determine the best transaction for stakeholders.
The company has requested a stay of proceedings, including creditor claims, and authorization for interim debtor-in-possession financing. Deloitte Restructuring Inc. will be appointed as monitor. Trading of Lion's securities on both TSX and NYSE has been halted, with TSX initiating a delisting review under its expedited process.
Lion Electric (NYSE: LEV) (TSX: LEV), produttore di veicoli elettrici urbani di medie e grandi dimensioni, ha presentato richiesta di protezione dai creditori ai sensi della Companies' Creditors Arrangement Act (CCAA) presso la Corte Superiore del Québec. L'azienda cerca il riconoscimento delle procedure CCAA negli Stati Uniti ai sensi del Capitolo 15 del Codice della Bancarotta. La richiesta include un processo formale di vendita e sollecitazione di investimenti (SISP) per determinare la migliore transazione per gli stakeholder.
L'azienda ha richiesto una sospensione delle procedure, comprese le pretese dei creditori, e l'autorizzazione per un finanziamento provvisorio in capo all'amministratore. Deloitte Restructuring Inc. sarà nominata come monitor. La negoziazione dei titoli di Lion su TSX e NYSE è stata sospesa, con TSX che ha avviato una revisione per l'esclusione dai listini seguendo un processo accelerato.
Lion Electric (NYSE: LEV) (TSX: LEV), un fabricante de vehículos eléctricos urbanos de media y gran capacidad, ha solicitado protección de acreedores bajo la Ley de Arreglos de Acreedores de las Empresas (CCAA) ante la Corte Superior de Quebec. La compañía busca el reconocimiento de los procedimientos de CCAA en Estados Unidos bajo el Capítulo 15 del Código de Bancarrota. La solicitud incluye un proceso formal de venta y solicitud de inversión (SISP) para determinar la mejor transacción para los interesados.
La empresa ha solicitado una suspensión de los procedimientos, incluidas las reclamaciones de los acreedores, y autorización para financiamiento provisional en calidad de deudor en posesión. Deloitte Restructuring Inc. será nombrada como monitora. La negociación de los valores de Lion en TSX y NYSE ha sido detenida, con TSX iniciando una revisión para la exclusión bajo su proceso acelerado.
라이온 일렉트릭 (NYSE: LEV) (TSX: LEV), 중형 및 대형 전기 도시 차량 제조업체가 퀘벡 고등 법원에 기업 채권자 합의법(CCAA) 아래에서 채권자 보호를 신청했습니다. 이 회사는 미국에서 파산법 제15장에 따라 CCAA 절차 인정을 요청합니다. 신청에는 이해관계자를 위한 최상의 거래를 결정하기 위한 공식적인 판매 및 투자 요청 프로세스(SISP)가 포함되어 있습니다.
회사는 채권자 청구를 포함한 절차 중단과 임시 채무자 자산 제공 재정 지원에 대한 승인을 요청했습니다. 딜로이트 리스스트럭쳐링 주식회사가 모니터로 임명될 예정입니다. TSX 및 NYSE에서 라이온의 증권 거래는 중단되었으며, TSX는 신속한 절차에 따라 상장 폐지 검토를 시작했습니다.
Lion Electric (NYSE: LEV) (TSX: LEV), un fabricant de véhicules urbains électriques de moyenne et grande taille, a déposé une demande de protection des créanciers en vertu de la Loi sur les arrangements de créanciers des sociétés (CCAA) auprès de la Cour supérieure du Québec. L'entreprise cherche à obtenir la reconnaissance des procédures de la CCAA aux États-Unis en vertu du Chapitre 15 du Code de la faillite. La demande comprend un processus formel de vente et de sollicitation d'investissements (SISP) pour déterminer la meilleure transaction pour les parties prenantes.
La société a demandé une suspension des procédures, y compris des créances des créanciers, ainsi qu'une autorisation de financement provisoire à titre de débiteur en possession. Deloitte Restructuring Inc. sera désignée comme surveillante. Le commerce des titres de Lion à la TSX et à la NYSE a été suspendu, la TSX ayant initié un examen de radiation selon une procédure accélérée.
Lion Electric (NYSE: LEV) (TSX: LEV), ein Hersteller von elektrischen städtischen Fahrzeugen in mittlerem und Schwertransportbereich, hat beim Obersten Gerichtshof von Quebec Gläubigerschutz gemäß dem Companies' Creditors Arrangement Act (CCAA) beantragt. Das Unternehmen strebt die Anerkennung der CCAA-Verfahren in den USA gemäß Kapitel 15 des Insolvenzgesetzes an. Der Antrag umfasst einen formalen Verkaufs- und Investitionsanfrageprozess (SISP), um die beste Transaktion für die Stakeholder zu bestimmen.
Das Unternehmen hat um Aussetzung der Verfahren, einschließlich der Gläubigerforderungen, und um Genehmigung einer vorläufigen Finanzierung für den Schuldner in Eigenverwaltung gebeten. Deloitte Restructuring Inc. wird als Überwachungsbehörde eingesetzt. Der Handel mit Lions Wertpapieren an der TSX und NYSE wurde ausgesetzt, wobei die TSX eine Überprüfung der Delistung im Rahmen eines beschleunigten Verfahrens eingeleitet hat.
- Interim debtor-in-possession financing to be provided by senior lenders to fund operations during restructuring
- Management will maintain day-to-day operations during CCAA proceedings
- Filed for creditor protection under CCAA
- Trading halted on TSX and NYSE
- Under expedited delisting review by TSX
- Covenant relief period expired under senior revolving credit agreement
- Loan agreement with Finalta Capital and Caisse de dépôt et placement du Quebec matured
Insights
This CCAA filing represents a critical turning point for Lion Electric, signaling severe financial distress. The company's inability to meet credit obligations has forced it into creditor protection, similar to Chapter 11 bankruptcy in the US. The DIP financing arrangement and SISP process indicate a complete restructuring is imminent, with potential outcomes ranging from asset sales to a complete company sale.
The trading halt and delisting review on both TSX and NYSE suggest significant shareholder value erosion. The involvement of major creditors like Caisse de dépôt et placement du Quebec points to substantial debt obligations. This restructuring could lead to significant dilution or complete loss for current equity holders, as debt holders typically have priority claims in such proceedings.
The CCAA filing provides Lion Electric with important breathing room through the stay of proceedings, preventing creditors from taking immediate collection actions. The parallel Chapter 15 filing in the US is strategic, ensuring cross-border protection of assets and operations. The appointment of Deloitte as monitor adds credibility to the restructuring process and provides necessary oversight.
The SISP process under court supervision will likely result in a substantial reorganization of the company's capital structure. Current shareholders should note that CCAA proceedings typically result in significant or total equity impairment, as creditors' claims take precedence in the capital structure.
In its application for an initial order, the Company seeks the approval of a formal sale and investment solicitation process ("SISP") in order to provide interested parties with the opportunity to submit proposals with a view to enabling the Company and its senior lenders to determine the highest and best available transaction for the Company and its stakeholders.
The initial order application seeks, among other things, a stay of proceedings in favor of the Company and its subsidiaries, including a stay of creditor claims and exercise of contractual rights, and the authorization of an interim debtor-in-possession (DIP) financing to be provided by the lenders under the Company's senior revolving credit agreement in order to fund the SISP and the Company's operations during the restructuring process. Approval is also being sought for the appointment of Deloitte Restructuring Inc. as monitor to oversee the CCAA proceedings and report to the Court. While under CCAA protection, management of the Company will remain responsible for the day-to-day operations of the Company under the oversight of the monitor.
This announcement follows the press release issued by the Company on December 17, 2024 announcing the expiry of the covenant relief period under the Company's senior revolving credit agreement and maturity of the Company's loan agreement with Finalta Capital and Caisse de dépôt et placement du Quebec.
Trading in the common shares and other listed securities of the Company on the Toronto Stock Exchange ("TSX") and the New York Stock Exchange (the "NYSE") has been halted. The TSX has also put the Company under delisting review under its expedited review process. It is anticipated that trading in the Company's listed securities will continue to be halted until completion of the review undertaken by the TSX and the NYSE regarding the suitability of the Company for listing on the TSX and the NYSE.
ABOUT LION ELECTRIC
Lion Electric is an innovative manufacturer of zero-emission vehicles, including all electric school buses. Lion is a North American leader in electric transportation and designs, builds and assembles many of its vehicles' components, including chassis, battery packs, truck cabins and bus bodies.
Always actively seeking new and reliable technologies, Lion vehicles have unique features that are specifically adapted to its users and their everyday needs. Lion believes that transitioning to all-electric vehicles will lead to major improvements in our society, environment and overall quality of life. Lion shares are traded on the New York Stock Exchange and the Toronto Stock Exchange under the symbol LEV.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking information" and "forward-looking statements" within the meaning of applicable securities laws and within the meaning of the United States Private Securities Litigation Reform Act of 1995 (collectively, "forward-looking statements"), including statements regarding the CCAA proceedings and SISP and the related filing of an application to the Court, trading in the Company's common shares and other listed securities, and statements about Lion's beliefs and expectations and other statements that are not statements of historical facts. Forward-looking statements may be identified by the use of words such as "believe," "may," "will," "continue," "anticipate," "intend," "expect," "should," "would," "could," "plan," "project," "potential," "seem," "seek," "future," "target" or other similar expressions and any other statements that predict or indicate future events or trends or that are not statements of historical matters, although not all forward-looking statements may contain such identifying words. The forward-looking statements contained in this press release are based on a number of estimates and assumptions that Lion believes are reasonable when made. Such estimates and assumptions are made by Lion in light of the experience of management and their perception of historical trends, current conditions and expected future developments, as well as other factors believed to be appropriate and reasonable in the circumstances. However, there can be no assurance that such estimates and assumptions will prove to be correct. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. For additional information on estimates, assumptions, risks and uncertainties underlying certain of the forward-looking statements made in this press release, please consult section 23.0 entitled "Risk Factors" of the Company's annual management's discussion and analysis of financial condition and results of operations (MD&A) for the fiscal year 2023 and in other documents filed with the applicable Canadian regulatory securities authorities and the Securities and Exchange Commission, including the Company's interim MD&As. Many of these risks are beyond Lion's management's ability to control or predict. All forward-looking statements attributable to Lion or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements contained and risk factors identified in the Company's annual MD&A for the fiscal year 2023 and in other documents filed with the applicable Canadian regulatory securities authorities and the Securities and Exchange Commission. Because of these risks, uncertainties and assumptions, readers should not place undue reliance on these forward-looking statements. Furthermore, forward-looking statements speak only as of the date they are made. Except as required under applicable securities laws, Lion undertakes no obligation, and expressly disclaims any duty, to update, revise or review any forward-looking information, whether as a result of new information, future events or otherwise.
See section 2.0 of the Company's interim management's discussion and analysis for the three and nine months ended September 30, 2024 (the "Interim MD&A"), entitled "Basis of Presentation," section 15.0 of the Company's Interim MD&A entitled "Liquidity and Capital Resources," and note 2 of the Company's unaudited condensed interim consolidated financial statements as at September 30, 2024 and for the three and nine months ended September 30, 2024 and 2023 which indicate the existence of material uncertainty that may cast significant doubt on the Company's ability to continue as a going concern.
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SOURCE The Lion Electric Co.
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